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Zenith Bank announces N119.79bn pre-tax profit

Zenith Bank Plc has released its audited results
for the 2014 financial year, declaring an 8.3 per cent increase in profit
before tax.

The results, published by the Nigerian Stock
Exchange on Thursday, showed that the group’s PBT rose from N110.597bn to
N119.796bn in the review period, while its profit after tax edged up by 4.3 per
cent to N99.455bn from N95.318bn in the previous year.

This followed a 14.76 per cent year-on-year
growth in gross earnings. Gross earnings rose from N351.470bn to N403.343bn.

Earnings per share was up by 4.98 per cent to
N3.16 from N3.01, while total assets jumped by 16.3 per cent to N3.755tn from
N3.143tn in 2013.

The group also increased its loans and advances
by 38.21 per cent to N1.729tn from N1.251tn.

The results also showed that the board of
directors had proposed a dividend of N1.75 per share – the same amount it
proposed for 2013 – from the retained earnings account as at 31 December 2014.

“This is subject to approval by shareholders at
the next Annual General Meeting,” it said.

The board added, “If the proposed dividend is
approved by the shareholders, the bank will be liable to pay additional
corporate tax estimated at N16.48bn, which represents the difference between
the tax liability calculated at 30 per cent of the dividend approved and the
minimum tax charge reported in the statement of profit or loss and other
comprehensive income for year ended 31 December 2014.”

Analysts at FBN Capital Research said, “All in
all, the results were ahead of expectations. Zenith delivered an Return on
Average Equity of 19 per cent for 2014. We would expect consensus estimates for
2015 to move up slightly.

“On the back of the results, we would expect the
market to react positively, with the caveat that concerns about the impact of
the fallout from the decline in oil prices are likely to linger a bit. Zenith
shares have outperformed the index this year, gaining 3.2 per cent compared
with a loss of -12.4 per cent for the ASI. We rate Zenith Bank shares Neutral.
Our estimates are under review.”